{"id":47148,"date":"2016-01-06T05:50:07","date_gmt":"2016-01-06T13:50:07","guid":{"rendered":"https:\/\/brookstradingcourse.com\/?p=47148"},"modified":"2016-01-07T01:52:24","modified_gmt":"2016-01-07T09:52:24","slug":"day-trading-trip-is-to-expect-a-trend","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/es\/analysis\/market-update\/day-trading-trip-is-to-expect-a-trend\/","title":{"rendered":"Intraday market update: January 6, 2016
Day trading tip is to expect a trend"},"content":{"rendered":"

Posted 7:00 a.m.<\/p>\n

The Emini opened with a big gap down, but there were no bear bodies in the 1st 5 bars. This lowered the probability of bear trend day. However, there were 4 dojis. This lowered the probability of a strong bull trend day. Dojis are small trading ranges, and this open increases the chances for a lot of trading range price action today. At the moment, the Emini is Always In Long, but the bulls need a strong breakout with follow-through. Without that, bulls will mostly scalp, and they will prefer to buy low. Pullbacks can be deep.<\/p>\n

The bears need a series of bear bars or a big bear breakout. Without those, they will only sell high and mostly with limit orders. The Emini might go sideways for an hour or 2 until it gets closer to the moving average. The bears will look for a reversal down from a double top or wedge top. If there is a reversal down, bulls will look to buy a double bottom or wedge bottom. Stop entry traders in a breakout mode market want strong signal bars.<\/p>\n

Pre-Open Market Analysis
\nS&P 500 Emini: Day trading tip is to expect a trend<\/h2>\n

I mentioned yesterday that the daily chart of the Emini had a major topping pattern. I call it a small breakout of a small breakout. I said that the pattern needed the Emini to rally for a few days after Monday’s reversal up from its small breakout below the December 14 low, which was a small breakout below the November 16 low. Those 3 pushes down created a wedge bull flag. When there is a flat bull flag like this that tries to reverse up, but then trades below its bottom (Monday’s) low, there is a 60% chance of a measured move down, which would be a test of the August low area. The Emini only rallied 1 day, which might not have been enough to trap a lot of bulls. Because of this, the probability of the measured move down is probably less than 60%, but if there is follow-through selling for a day or two, the probability will be back to 60%. The bears need a strong bear trend bar today and at least a bear bar tomorrow. If tomorrow is also a big bear bar, the odds of a swing down would become greater than 60%.<\/p>\n

The Stock market opens in less than an hour and the Globex market is down 36 points. Today has the potential to be a big trend day in either direction, and online day traders should not be in denial if one begins to unfold. Because this is another breakout attempt and 80% fail, the bulls will try hard to create a reversal up today. If the bulls are very strong, the Emini will not trade much below the open. The bears need a strong bear trend day. They will try to prevent the day from trading much above the open. They then hope for a strong bear trend day all day. They want the candlestick pattern on the daily chart to be a very big bear trend bar that closes near its low. <\/p>\n

The Emini might disappoint the bulls and the bears by creating another trading range day. This would be better for the bulls than the bears because the bears need a strong bear day. Anything less lowers the probability that the breakout will be successful. If there are a lot of dojis and reversals in the 1st hour, the odds of a trend day in either direction will fall and the day will more likely have a lot of trading range price action.<\/p>\n

Forex: Best trading strategies<\/h2>\n

Nothing has changed on the daily chart of the EURUSD. As long as the selloff holds above the December 3 low, the odds are that there will be a 2nd leg up. On the 240 minute chart, it broke below the neck line of a head and shoulders top. It might have a little more down, but it will still probably form a higher low. I mentioned yesterday that the selloff was in a series of consecutive sell climaxes and that yesterday would probably be a trading range day. The bulls now see the low of 6 hours ago as a higher low major trend reversal. The bears see the lack of a strong reversal up over the past 3 hours as a sign that the 2 day trading range is just another bear flag. The odds of a bear breakout are the same as for a bull breakout. However, a bear flag after a series of sell climaxes is likely to be the final bear flag before a reversal. This means that the odds are that any bear breakout will not go far before the 2nd leg up on the daily chart begins. <\/p>\n

Because yesterday’s bear breakout on the daily chart was strong, the daily chart might have one more small push down. It might need a micro double bottom before it can turn up. Less likely, the selloff will break below the December 3 low. If so, it might fall for a measured move down based on the height of the yearlong trading range.<\/p>\n

Summary of today’s S&P Emini futures price action and what to expect tomorrow<\/h2>\n

\"The<\/a><\/p>\n

The Emini was in a trading range day, but reversed up at the end of the day and close above the open.<\/p>\n

The Emini had trading range price action from the 1st bar. It traded up in a bull channel for 2 hours, and then down for 3 hours. After a sell climax, it reversed back up. The bears needed a much stronger bear breakout on the daily chart. While this reversal up today is not especially strong, it is a sign that the bears are not willing to sell too low. This increases the chances for higher prices over the next few days.<\/p>\n

See the weekly update<\/a> for a discussion of the price action on the weekly candlestick chart and for what to expect going into next week.<\/p>\n

\n

Traders can see the end of the day bar-by-bar price action report by signing up<\/a> for free at BrooksPriceAction.com. I talk about the detailed S&P Emini futures price action real-time throughout the day in the BrooksPriceAction.com trading room<\/a>, and a 2 day free trial<\/a> is available.<\/p>\n

When I mention time, it is USA Pacific Standard Time (the Emini day session opens at 6:30 am PST, and closes at 1:15 pm PST). You can read background information on the intraday market reports on the Intraday Market Update<\/a> page.<\/p>\n

\n","protected":false},"excerpt":{"rendered":"

Posted 7:00 a.m. The Emini opened with a big gap down, but there were no bear bodies in the 1st 5 bars. This lowered the probability of bear trend day. However, there were 4 dojis. This lowered the probability of a strong bull trend day. Dojis are small trading ranges, and this open increases the […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[153],"tags":[],"class_list":{"0":"post-47148","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-market-update","7":"entry","8":"has-post-thumbnail","9":"override"},"featured_image_src":null,"author_info":{"display_name":"Al","author_link":"https:\/\/www.brookstradingcourse.com\/es\/author\/albrooks\/"},"_links":{"self":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts\/47148","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/comments?post=47148"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts\/47148\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/media?parent=47148"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/categories?post=47148"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/tags?post=47148"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}